Administrative Law

HOLDING: The petitioner failed to exhaust its administrative remedies when it sought judicial review before obtaining a contested case hearing.

edu daniel.blinka marquette Prof. Daniel D. Blinka, U.W. 1978, is a professor of law at Marquette University Law School, Milwaukee.

edu thomas.hammer marquette Prof. Thomas J. Hammer, Marquette 1975, is a law professor and Director of Clinical Education at Marquette University Law School, Milwaukee.

SUMMARY: The Clean Water Action Council (CWAC) opposed the decision of the Wisconsin Department of Natural Resources (DNR) to reissue a pollution discharge permit to a company. CWAC filed a petition for judicial review of the DNR’s action, which the circuit court dismissed on grounds that CWAC failed to first obtain a contested case hearing under Wis. Stat. section 283.63, thereby failing to exhaust its administrative remedies.

The court of appeals affirmed in an opinion written by Judge Stark. CWAC failed to exhaust its administrative remedies under Wis. Stat. section 283.63. CWAC’s contentions to the contrary were “foreclosed” (¶ 10) by Sewerage Commission v. DNR, 102 Wis. 2d 613, 307 N.W.2d 189 (1981), a case that was “on point and is controlling precedent in this case” (¶ 16). Sewerage Commission “has been the law for over thirty years, but the legislature has not amended the relevant statutes to provide an alternative method of review for [pollution discharge] permitting decisions” (id.).

The court rejected an array of related arguments CWAC made against application of Sewerage Commission. The court also noted that a contested case hearing also had the virtue of providing a record more amenable to “effective judicial review” (¶ 23).

Nor did this case fall within any exception to the exhaustion doctrine. Although the review procedure under Wis. Stat. section 283.63 is unavailable to CWAC itself, the court found it “nearly impossible to believe CWAC would have been incapable of identifying four other persons willing to join its petition,” as required by statute(¶ 26). Again the court chided CWAC for not following the long-standing precedent in Sewerage Commission (see ¶ 28).

Attorneys

HOLDING: A law firm that distributed settlement payments from a trust account was not bound by the hospital lien statute, Wis. Stat. section 779.80, nor was the law firm obligated to indemnify the tortfeasor’s insurer under theories of contract, negligence, or equitable estoppel.

SUMMARY: The Hupy and Abraham S.C. law firm (Hupy) settled a personal injury case for its client. The tortfeasor’s insurer made the settlement check payable to Hupy’s trust account. Hupy distributed the money to its client and others, but not to the medical center, although Hupy was aware the client owed money to the medical center. Seeking to recover its expenses, the medical center sued both Hupy and the insurer. The insurer cross-claimed against Hupy. The circuit court ruled that both Hupy and the insurer were subject to the medical center’s lien. See Wis. Stat. § 779.80. The court also found that Hupy must indemnify the insurer.

The court of appeals reversed in an opinion authored by Judge Lundsten. “The primary question here is one of statutory interpretation involving whether, under the hospital lien statute, Wis. Stat.§ 779.80, an attorney or law firm who receives and then distributes a settlement payment on a personal injury claim is, under the lien statute’s language, a ‘person making any payment to [the] injured person … as compensation for the injuries sustained.’ See§ 779.80(4). We conclude that an attorney or law firm that merely receives and distributes a settlement payment is not such a ‘person.’ General Casualty, however, is such a ‘person’ because General Casualty ‘ma[de] … payment to [McGuire] ... as compensation for the injuries sustained.’ Therefore, so far as the hospital lien statute is concerned, General Casualty, not Hupy, is liable to the Medical Center under the statute” (¶ 2).

In explaining its conclusion based on the plain statutory language, the court emphasized that an intermediary that passes along a payment, as Hupy did here, is not a person “making any payment … as compensation” within the statute’s meaning (¶ 12). The insurer, however, was “plainly … such a person” (¶ 15).

Nor was Hupy obliged to indemnify the insurer based on breach of a contract, namely, Hupy’s signing of the settlement release. Such signatures are required by Wis. Stat. section 757.38, which creates no indemnification duty (see ¶ 42), and “nothing in the release indicates that Hupy agreed to indemnify General Casualty or to otherwise be responsible for facilitating payment to the Medical Center” (¶ 40). Finally, nothing in the mediation agreement created such a duty, either: “the only pertinent observation to make about the check is that Hupy’s trust account was a temporary repository for General Casualty’s payment to [the client]” (¶ 43).

Finally, Hupy had no duty to indemnify the insurer based on negligence or equitable estoppel claims. Discussing Yorgan v. Durkin, 2006 WI 60, the court was unsure whether the insurer could even state such claims against Hupy but held, regardless, the “undisputed facts” provided no basis for the claim (see ¶ 46). That Hupy was aware of the outstanding medical expenses “[did] not show that Hupy undertook a duty to pay” the medical provider (¶ 47).

“The crux of General Casualty’s equitable estoppel claim as we understand it is that Hupy’s actions induced General Casualty to reasonably rely on Hupy to pay the Medical Center from the settlement proceeds. There is a disconnect, however, in General Casualty’s argument because the Hupy ‘actions’ on which General Casualty relies are Hupy’s payments to other third parties from the settlement proceeds. By the time of those Hupy actions, General Casualty had already entered into the settlement and paid the $30,000. It makes no sense to say that General Casualty entered into the settlement and paid the money relying on Hupy’s later actions” (¶ 49).

Criminal Law

HOLDING: The defendant’s prior federal conviction served as a predicate offense that elevated a cocaine charge from a misdemeanor to a felony.

SUMMARY: Following a bench trial, the defendant was convicted of cocaine possession. He also pleaded guilty to bail jumping. Both were felony offenses because of his prior federal conviction for racketeering activities related to drug dealing. The circuit court rejected his argument that the federal conviction was an improper predicate and that both state charges thus should have been misdemeanor offenses.

The court of appeals affirmed in an opinion written by Judge Fine. The federal RICO statute broadly defines racketeering activity; included is “dealing in a controlled substance” (¶ 7). Examining the federal RICO statute along with the defendant’s guilty plea to a RICO offense in federal court, the court held that the federal conviction was a proper predicate under Wis. Stat. section 961.41(3g)(c) for enhancing the cocaine charge from a misdemeanor to a felony.

The circuit court properly considered the defendant’s federal indictment and guilty plea in finding that it related to federal drug offenses (see ¶ 12). The court rebuffed the defendant’s invitation to invoke the “rule of lenity” or find a lack of “fair warning” under the Due Process Clause based on an analogous decision by the U.S. Supreme Court (¶ 13).

Criminal Procedure

HOLDING: A witness’s recantation of testimony did not entitle a defendant to withdraw, in the interest of justice, a guilty plea entered in 1995.

SUMMARY: The defendant pleaded guilty to a charge of reckless homicide in connection with a 1995 shooting. Several witnesses testified to his role in the murder at a preliminary examination. Years later, witnesses recanted their testimony. The circuit court, however, denied the defendant’s motion to withdraw his guilty plea in the interest of justice.

The court of appeals, in an opinion authored by Judge Fine, affirmed. The opinion sets forth the different standards that govern the withdrawal of pleas before sentencing and, as here, after sentencing. In the context of this case, however, “there is no meaningful distinction” between the two based on the circuit court’s ruling that the recantations were incredible (¶ 24). In effect, then, the defendant was “fighting a battle that he cannot win” (¶ 27). Because the circuit court found the recantations were incredible, the court did not need to consider whether there was a probability that a different result would be reached in a new trial (see ¶ 30).

HOLDING: Police officers’ objectively reasonable reliance on binding appellate precedent that later was undone by the U.S. Supreme Court fell within the good-faith exception to the exclusionary rule.

SUMMARY: In 2011, police officers placed a GPS tracking device on Oberst’s car while it was parked in a public lot. Data from the device was collected in an investigation that resulted in the filing of criminal drug charges against Oberst. While the case was pending, the U.S. Supreme Court held that the installation and use of such a tracking device constituted a search that required a warrant. See United States v. Jones, 132 S. Ct. 945 (2012). Jones upended numerous lower court cases to the contrary. The circuit court, however, denied Oberst’s Jones-basedmotion to suppress, and he pleaded guilty to several counts.

The court of appeals affirmed in an opinion written by Judge Reilly. When police officers acted in this case, binding precedent held that the use of such a tracking device was not a search for Fourth Amendment purposes (see ¶ 8). Jones held to the contrary. Nonetheless, the police acted in an objectively reasonable reliance on the pre-Jones case law. The court also rejected the defendant’s argument that Jones should be applied retroactively to exclude the GPS evidence (see ¶ 9).

HOLDING: The circuit court erred by applying an incorrect standard of prejudice when the defendant claimed that his counsel was deficient for failing to advise him of the automatic deportation consequences of the crime to which he pleaded guilty.

SUMMARY: Defendant Mendez sought to withdraw his guilty plea to the charge of maintaining a drug trafficking place. See Wis. Stat. § 961.42(1) (2011-12). Before Mendez entered the plea, Mendez’s attorney failed to inform him that conviction of this charge would subject him to automatic deportation from the United States with no applicable exception and no possibility of discretionary waiver (see ¶ 1).See8 U.S.C. § 1182(a)(2)(A)(i)(II) (2006). The circuit court recognized that Mendez’s counsel was deficient in failing to tell Mendez about these clear deportation consequences.The court rejected Mendez’s motion, however, reasoning that Mendez could not establish that the lawyer’s error prejudiced his case because he did not show that “there would be a different outcome” or that he had “real and viable challenges to the underlying veracity of the conviction”(¶ 1).

In a decision authored by Chief Judge Brown, the court of appeals reversed. Applying Padilla v. Kentucky, 559 U.S. 356 (2010), the appellate court concluded that the circuit court applied the wrong standard in assessing prejudice.

“UnderPadilla, counsel’s failure to advise a defendant concerning clear deportation consequences of his [or her] plea bargain is prejudicial if the defendant shows that ‘a decision to reject the plea bargain would have been rational under the circumstances’” (¶ 2) (citation omitted). Here, the question was not merely whether Mendez would have won his trial but whether in his particular circumstances (he is married to a U.S. citizen with whom he has a young child and he fears retribution by his co-defendant’s family should he return to Mexico), he might rationally have decided to reject the plea and risked four and one-half years in prison, so as to preserve a chance of avoiding deportation (see ¶ 17).

Accordingly, the court of appeals reversed and remanded with directions that the circuit court apply the correctPadillastandard for assessing prejudice.

HOLDING: The defendant demonstrated a new factor in his sentence-modification motion by showing that the amount of sentence credit to which he was entitled was a factor highly relevant to sentencing and that the circuit court misunderstood the amount of credit to which he was entitled.

SUMMARY: Defendant Armstrong appealed his conviction and an order denying his motion for sentence modification on the basis of a new factor. Armstrong argued that a new factor exists because 1) at the time of the original sentencing, the parties and the circuit court believed that Armstrong was entitled to approximately two years of sentence credit; and 2) the court’s belief about the length of sentence credit was highly relevant to the court’s imposition of sentence; but 3) Armstrong was in fact entitled to only eight months of sentence credit (see ¶ 1).

In a decision authored by Judge Kloppenburg, the court of appeals reversed. It concluded that “Armstrong has demonstrated by clear and convincing evidence the existence of a new factor, namely, the unknowingly overlooked fact that Armstrong was entitled to eight months, not approximately two years, of sentence credit” (¶ 18).

“We agree with Armstrong that the amount of sentence credit to which Armstrong was entitled was a factor highly relevant to the imposition of the sentence. Throughout the sentencing hearing, the circuit court pointedly and repeatedly drew attention to the amount of sentence credit to which Armstrong would be entitled, and made clear why the topic was important to the court” (¶ 16) (internal quotations and citation omitted). The appellate court accordingly remanded the case to the circuit court to determine whether the new factor justifies modification of the sentence.

The appellate court considered the state’s argument that Struzik v. State, 90 Wis. 2d 357, 279 N.W.2d 922 (1979), prohibits a court from considering the amount of sentence credit to which a defendant is entitled before determining the appropriate sentence. After reviewing several cases on the subject, the appellate court concluded that “these cases set forth the following distinction concerning the consideration of sentence credit as a factor in determining the sentence: a court may consider the amount of sentence credit to which the defendant is entitledso long asthe court does not do so with the purpose of enlarging the sentence to deprive the defendant of his or her right to receive sentence credit. This conclusion is consistent with the express statement inGallion [State v. Gallion, 2004 WI 42, 270 Wis. 2d 535, 678 N.W.2d 197] that courts may consider the length of pretrial detention in determining the sentence” (¶ 30) (internal quotations omitted).

HOLDING: The defendant’s burden of persuasion on the issue of competency in the postconviction context is the preponderance/greater weight of the evidence.

SUMMARY: Defendant Daniel, who had been diagnosed as having schizophrenia, was sentenced to life in prison. Daniel’s postconviction counsel questioned Daniel’s ability to understand his Wis. Stat. section 809.30 appellate rights and also questioned Daniel’s ability to effectively communicate with counsel. Daniel told the court that he was competent, and therefore the state did not present any evidence concerning Daniel’s competency. The circuit court scheduled an evidentiary hearing and placed the burden of persuasion on Daniel’s counsel to prove Daniel’s incompetency by “clear and convincing evidence.” That burden was not met, and the circuit court found Daniel competent.

The crucial issue on appeal was whether the circuit court used the correct burden of persuasion. This is a question of first impression in Wisconsin. In a decision authored by Judge Reilly, the court of appeals concluded that “a court may allocate the burden of persuasion to the defendant (or defense counsel) in a postconviction competency proceeding, but must utilize the lower ‘preponderance/greater weight of the evidence’ burden of proof when doing so. The circuit court erred by imposing the middle ‘clear and convincing’ evidence standard…” (¶ 2).

Employment Law

HOLDING: Two county employees were properly suspended for good cause and thus were not entitled to unemployment benefits.

SUMMARY: This case consolidates the appeals of two corrections officers who were suspended from their jobs pending termination. One employee failed to conduct a check of an inmate who committed suicide, and the other was tardy on several occasions. Both employees applied for unemployment benefits over the county’s objections. At issue is Wis. Stat. section 108.46, which renders employees ineligible for benefits until three weeks have elapsed following a suspension (see ¶ 9). The Labor and Industry Review Commission (LIRC) ultimately ruled in favor of both employees, a finding the circuit court upheld as reasonable (see ¶ 10).

The court of appeals reversed the circuit court in an opinion, written by Judge Kessler, that applied the great-weight standard of review. LIRC contended that neither employee was suspended for disciplinary reasons, and thus each was eligible for benefits under the statute. The court concluded “that LIRC’s reading of § 108.04(6) is unreasonable because it ignores the work-connected facts causing the requests for termination and the related suspensions pending completion of the hearing process” (¶ 19).

“[U]nder this statute an employer’s reason(s) for suspending an employee must involve specific conduct by the employee which is directly ‘connected to the employee’s work’” (¶ 23). The facts showed that the suspensions pending termination were adequately “connected” to the employees’ work (see ¶ 24).

Motor Vehicle Law

HOLDING: The circuit court erred in prohibiting a defendant convicted of operating while intoxicated (OWI) (seventh offense) from driving as a condition of extended supervision.

SUMMARY: Hoppe was convicted of seventh-offense OWI.The circuit court sentenced him to nine years’ imprisonment, split evenly between initial confinement and extended supervision. The court granted the state’s request to revoke Hoppe’s motor vehicle operating privileges for the maximum three years permitted by Wis. Stat. section 343.30(1q)(b)4., which revocation effectively would commence when Hoppe was released from confinement. Additionally, the court ordered an extended-supervision condition: prohibiting Hoppe from operating a motor vehicle. Hoppe filed a postconviction motion asking the court to remove the condition prohibiting him from operating a motor vehicle while on extended supervision. The circuit court denied the motion.

In a decision authored by Judge Hoover, the court of appeals reversed. The court of appeals stated that there was no dispute that the condition prohibiting Hoppe from operating a vehicle was reasonable, appropriate, and designed to protect the public (see ¶ 7). Nonetheless, a sentencing court cannot impose what might otherwise be a reasonable and appropriate condition of supervision, if doing so would conflict with another statutory provision (see ¶ 8).

In this case, Wis. Stat. section 343.30(1q)(a) provides that if a person is convicted of OWI, “the courtshallproceed under this subsection” (emphasis added). For third and subsequent OWI convictions “the courtshallrevoke the person’s operating privileges for not less than 2 years nor more than 3 years.” Wis. Stat. § 343.30(1q)(b)4. (emphasis added). “No court may suspend or revoke an operating privilege except as authorized by this chapter [or other statutes not applicable here]” Wis. Stat.§ 343.30(5).

Based on the plain statutory language, the appellate court concluded that “a court may not restrict a person’s right to operate a vehicle, except as provided in Wis. Stat. § 343.30(5)” (¶ 14). Accordingly, it reversed that part of the judgment prohibiting Hoppe from driving as a condition of extended supervision.

HOLDING: An Illinois “summary suspension” for an OWI-related incident may be counted as a prior conviction for purposes of enhancing OWI penalties in Wisconsin, but a prior reckless driving conviction in Illinois cannot be counted for enhancement purposes in Wisconsin.

SUMMARY: Defendant Jackson appealed from a Wisconsin conviction for fifth-offense OWI and an order denying his motion to dismiss the information.Jackson argued that he was improperly charged with and convicted of the fifth-offense OWI because it was improper for the circuit court to count two of the prior Illinois offenses that form the basis of the fifth-offense designation – a statutory summary suspension and a reckless driving conviction.

In a decision authored by Judge Gundrum, the court of appeals concluded that the circuit court properly counted the statutory summary suspension as a prior conviction, but that the reckless driving conviction cannot be counted.

The summary suspension related to a driving incident in Illinois in 1997. Jackson was issued a citation for OWI and operating with a prohibited alcohol concentration; these charges were dismissed and he received a summary suspension related to the incident. The court of appeals concluded that this summary suspension was a “conviction” under the statute Wisconsin uses to count prior out-of-state OWI violations (Wis. Stat. § 343.307(1)(d)) because it was a “determination … in … an authorized administrative tribunal” that Jackson “violated or failed to comply with the law” (¶ 10). Thus, it could be used to enhance penalties for a subsequent OWI in Wisconsin.

The same is not true for a 2003 Illinois reckless driving conviction. That case began with an arrest for OWI but the charge was subsequently amended to reckless driving. Said the court, “we cannot conclude that the conduct prohibited by the reckless driving charge for which Jackson actually was convicted permits that conviction to qualify as a prior conviction under § 343.307(1)(d). Every term in subsection (1)(d) relates in some way to a person operating a motor vehicle with either drugs or alcohol, or both, in his or her system. That critical aspect is completely absent from the reckless driving offense of which Jackson was convicted” (¶ 15). The court declined the state’s invitation to expand the language of Wis. Stat. section 343.307(1)(d) so as to consider the nature of the offense with which the defendant was originally charged (see ¶ 16).

Municipal Law

HOLDING: The county properly granted a conditional-use permit that permitted a frac sand mine to operate.

SUMMARY: The Buffalo County Board of Adjustment granted R&J Rolling Acres LLP (R&J) a conditional-use permit (CUP) to operate a frac sand mine. The board had denied a previous application by R&J, which never appealed the first denial. Members of the public (the petitioners) sought certiorari review of the CUP in the circuit court, which affirmed the board’s grant of the CUP.

The court of appeals affirmed in an opinion, written by Judge Stark, that addressed three principal contentions brought by the petitioners. First, the board did not proceed on an “incorrect theory of law.” Here the issue was whether a county zoning ordinance permitted frac sand mining. On certiorari review, the court must defer to the board’s interpretation of its own ordinance, provided it is reasonable.

“We conclude both [the petitioners] and the Board have advanced reasonable interpretations of § 41(1). From the text of the ordinance alone, it is unclear whether the phrase ‘for aggregate purposes’ modifies the entire preceding clause or only the words ‘the quarrying of limestone and other rock[.]’ Because the Board has advanced a reasonable interpretation of the ordinance’s text, we must defer to the Board’s interpretation” (¶ 16). Moreover, the board had “historically” interpreted the ordinance in the same way (¶ 19).

Second, R&J’s second application for a CUP was valid. The statutes did not require that R&J pursue judicial review of the first application’s denial before filing a second application (see ¶ 21). Nor did this impermissibly tilt the “playing field” in light of the “significant burden on the CUP applicant” (¶ 22). The court also rejected an argument based on claim preclusion (see ¶ 25).

Third, the board did not act arbitrarily by granting the CUP absent information about the identity of partners in R&J. The petitioners cited no legal authority in support of this argument, this concern was not voiced to the Board, and adequate enforcement mechanisms were in place (see ¶ 31).

Open Records Law

HOLDING: Identifying information related to emails sent to a state senator was subject to disclosure.

SUMMARY: A public policy group, the John K. MacIver Institute (the Institute), filed a writ of mandamus seeking “certain public policy related emails” directed to a state senator, Jon Erpenbach. The Institute wanted the emails “without redaction of information identifying the sender or the e-mail address.” Erpenbach opposed the request, arguing that the withholding of identifying information was “purely personal” and complied with the senate’s custom and practice, and that the issue was nonjusticiable in any event. The circuit court denied mandamus (see ¶ 1).

The court of appeals reversed in an opinion authored by Judge Gundrum. The court held that “this matter is justiciable, the redacted information is not ‘purely personal,’ and the public interest in keeping the identifying information secret does not outweigh the public interest in disclosure” (¶ 1).

First, the matter was justiciable. “Simply put, the Institute’s request for a writ does not relate to ‘purely internal legislative proceedings’ or implicate the methods or ‘process the legislature uses to propose or pass legislation’” (¶ 11).

Second, disclosure of the emails, including the senders’ identification, was mandated by law. Erpenbach did not dispute that the emails were public records (see ¶ 18). “Public awareness of ‘who’is attempting to influence public policy is essential for effective oversight of our government” (¶ 20). The same holds for the sender’s address (see ¶ 21). The public interest in disclosure was not outweighed by a need to keep the information secret (see ¶ 22). The court declined to recognize an exception for “contentious” issues, such as the battle over collective bargaining and Act 10.

The opinion closes as follows: “Transparency and oversight are essential to honest, ethical governance. Erpenbach has not met his burden of establishing that the public interest in nondisclosure of the redacted information outweighs the significant public interest in disclosure. Accordingly, he has not overcome the `strong presumption of complete openness’ with regard to the e-mails” (¶ 32).

Chief Judge Brown concurred. Plainly troubled by “the proliferating cesspit of anonymous online comments we see in today’s public environment” (¶ 37), he concluded the balancing test advocated by Erpenbach would open a “Pandora’s box.” Citizens and legislators, whoever they are and whatever their opinions, are now on notice “that communications to legislators are subject to the open records law, without redaction” (¶ 41).

Real Property

HOLDING: Property did not meet the definition of “undeveloped land,” and the circuit court properly rejected an appraiser’s valuation; however, the court should have ordered a reassessment.

SUMMARY: This lawsuit concerns the valuation of land in Sister Bay. The parties stipulated that, among other facts, the land is heavily wooded, has no buildings or dwellings, and “does not generate any income” (¶ 3). The owner objected to the village’s assessment of the property at approximately $4.4 million. Among the issues raised is the owner’s contention that the land’s assessed value should be reduced by 50 percent because it is “undeveloped land,” as provided by Wis. Stat. section 70.32(2(c)4. The circuit court rejected various appraisals by the parties but found the contested 2009 valuation excessive. It did not order a reassessment, instead imposing the 2010 assessment (see ¶ 15).

The court of appeals affirmed in part and reversed in part in an opinion written by Judge Stark. The land did not meet the statutory classification as undeveloped land under Wis. Stat. section 70.32(2)(c)4., which requires that it be both “nonproductive” and “not otherwise classified” under the statute (¶ 22). In sum, the property was capable of productive use regardless of its “actual use” (¶¶ 29-30). As to the second prong, “a property need not be zoned residential in order to be classified as residential property for tax purposes, as long as residential use is likely to be allowed,” which the evidence showed here (¶ 41).

The court properly rejected an appraisal offered by the property’s owner because it was not “reliable or accurate” (¶ 48). Nonetheless, the judge erroneously exercised his discretion by not ordering a reassessment under the facts presented (see ¶ 52).